The Beginning of an End of the Trans-Atlantic Alliance29/07/2014 21:14
Source: Ian Welsh Blog
Mark From Ireland
Ian described the proposed EU sanctions on Russia as “not shabby”, but while they are somewhat more serious sanctions than heretofore it’s only somewhat. The most serious ones are the ones on Russia’s financial institutions. Yes it’ll raise costs but will hurt London and Frankfurt including reputationally. It will also have the effect of encouraging Russia’s efforts to build an alternative. And as the FT article points out in the quote you’ve given if pushed they could retaliate and hurt any chances of European recovery quite badly:
The proposal would not initially include a similar prohibition for Russian sovereign bond auctions out of fear the Kremlin could retaliate by ordering an end to Russian purchases of EU government debt, the document states.
Also these measures would have to be agreed by all 28 members which I don’t see happening without a lot of acrimony. For more details if you’re interested see Leaked Russia sanctions memo: the details | Brussels blog :
The arms sanctions are Europe shooting themselves in the foot at the behest of the Americans. They won’t hurt Russia. And indeed could wind up helping Putin’s modernisation drive (see Russia has little to lose from arms embargo – FT.com)
Still, the Mistrals represent a rare example of Moscow turning to outside help when it comes to kitting out its military. As such, the effect of a western embargo could be limited.
“[Blocking the sale] would be symbolic more than hurtful,” says Keir Giles, a Russian defence expert at Chatham House, a think-tank in London. “Russia is an arms exporter, not an importer. There has already been all this fuss in Russia about imports from abroad.”
Indeed, since the Ukrainian crisis began to ratchet up international pressure on Moscow several months ago, the Russian defence establishment has become even more entrenched in its ambition to reconstitute parts of its defence industry that withered after the break-up of the Soviet Union.
Most of Russia’s $81bn defence budget is spent internally.
Since 2000, Russia has only engaged in 10 military contracts of any size from overseas suppliers: 4 light transport aircraft from the Czech Republic; 2 diesel engines from Germany; 8 drones from Israel; 60 light armoured vehicles from Italy; 3 light helicopters and 4 amphibious landing craft from France to complement the Mistrals; and from Ukraine, 264 engines, 34 transport aircraft and 100 guided missiles.
Moreover as the FT points out (see: EU to weigh far-reaching sanctions on Russia – FT.com) “Many ex-Warsaw Pact countries still rely on Russian-made military equipment”. So far not so alarming other than as a statement of intent. What I do find alarming because it’s blatant aggression is the idea of targeting Russia’s energy development. That’s telling the Russians that America and Europe holds them in the same contempt they hold Iran. Not wise. If you try to strangle their economy and simultaneously point a dagger at their heart they’re going to conclude not unreasonably that you intend waging a regime change war in the not to distant future. Such a war is unlikely to end well for anyone and anyone who thinks that Russia will not strive to lay waste their enemies heartlands has never talked to a Russian soldier let alone a Russian officer. They take threats to their home and those who live there very seriously and they believe in playing rough. (See: Leaked Russia sanctions memo: the details | Brussels blog):
For many involved in the debate – particularly the Obama administration – the energy sector is a far more important target given its centrality to the Russian economy. The measures under consideration in the document would restrict European sales of high-end energy technologies, which are similar to measures the US is working on. They would be very carefully targeted, however, and would only be aimed at long-term production so that it “should not disrupt current supply and trade in energy products”.